Internationalization process, impact of slack resources, and role of the CEO: The duality of structure and agency in evolution of cross-border acquisition decisions Dev K. Dutta a, *, Shavin Malhotra b , PengCheng Zhu c a Peter T. Paul College of Business & Economics, University of New Hampshire, 10 Garrison Avenue, Durham, NH 03824, United States b Conrad Business, Entrepreneurship and Technology Centre, University of Waterloo, Waterloo, Ontario, Canada N2L 6R5 c [1_TD$DIFF]School of Business[4_TD$DIFF] Administration, University of [5_TD$DIFF]San [6_TD$DIFF]Diego, [7_TD$DIFF]5998 [8_TD$DIFF]Alcala [9_TD$DIFF]Park, [10_TD$DIFF]San Diego, CA [11_TD$DIFF]92110, United States 1. Introduction Over the years, the IT giant Cisco Systems relied heavily on acquisitions as its primary growth strategy. Having made its first acquisition in 1993, Cisco acquired a total of 149 companies by 2011, both domestic and overseas. Interestingly, in the early years most of Cisco’s acquisitions were confined to computer networks, i.e. in its core area of expertise. Over time, however, Cisco began acquiring international companies that were outside its core specialization. Some of these include: Pirelli Optical Systems in 1999 (Fiber-optic Communication; Italy; 1999), Qeyton Systems (Wavelength-division Multiplexing; Sweden; 2000), KISS Tech- nology (Entertainment Technology; Denmark; 2005), AXIOSS Software and Talent (IT Service Management Software; Finland; 2011), and Ubiquisis (Mobile Software; UK; 2013). The progression of internationalization strategies of companies such as Cisco raises an important question: when and how does a multinational break free from its current cross-border acquisition (CBA) decision patterns and related entry-mode choices (majority versus minority ownership), to traverse a new internationalization trajectory? This paper attempts to answer this question. Internationalization over time, as reflected in the multina- tional’s CBA patterns and related entry mode choices, is a ‘‘... process of involvement, which sometimes flows within incremental commitment and other times does not’’ (Figueira-de-Lamos and Hadjikhani, 2014: 343, emphasis in original). These choices are complex (Erramilli, 1991; Johanson and Vahlne, 2009; Malhotra and Zhu, 2013) as well as risky (Ahmed, Mohamad, Tan, & Johnson, 2002; Mantecon, 2009). Further, evidence is mixed as to whether acquisitions, in general, create value for the acquiring firm, especially in the short-term (Haleblian, Devers, McNamara, Carpenter, & Davison, 2009). As such, it is not surprising that CBA decisions unfold as a process (Jemison and Sitkin, 1986), with experiential learning forming a critical foundation for future decisions (Barkema and Schijven, 2008; Very and Schweiger, 2001). Not only do firms engage in repetitive acquisitions (Aktas, de Bodt, & Roll, 2009), but they also utilize prior acquisition experience in building routines that guide their subsequent CBA decisions (Haleblian, Kim, & Rajagopalan, 2006; Hayward, 2002; Mukherji, Mukherji, Dibrell, & Francis, 2013). As a result, CBA decisions demonstrate path dependencies (Eriksson, Majkgard, & Sharma, 2000), where ‘‘structure’’ plays an important role. At the same time, multinationals incorporate learning by approaching each future acquisition as a way of building new Journal of World Business 51 (2016) 212–225 ARTICLE INFO Article history: Received 28 November 2014 Received in revised form 7 July 2015 Accepted 12 July 2015 Available online 20 August 2015 Keywords: Internationalization over time Cross-border acquisition decisions Structuration theory Slack resources CEO overconfidence CEO tenure ABSTRACT This paper examines how the internationalization process evolves. We do so by examining the cross- border acquisition (CBA) decisions of multinationals under the contingent impact of slack resources and CEO power and influence. Grounding our arguments in Giddens’ (1984) structuration theory, we identify how and why path-dependencies associated with CBA decisions give way to strategic change, demonstrating the duality of structure and agency in this evolutionary process. Further, we show that organizational slack and CEO overconfidence affect this relationship, albeit in dramatically different ways. Our hypotheses are tested on a large sample of 4812 CBAs of U.S. firms during 2000–2010, across 41 industries and in 44 target countries. The results hold for acquisition trajectories of multinationals in both categories of CBA decisions: majority as well as minority-owned. ß 2015 Elsevier Inc. All rights reserved. * Corresponding author. E-mail addresses: dev.dutta@unh.edu (D.K. Dutta), shavinm@gmail.com (S. Malhotra), pzhu@sandiego.edu (P. Zhu). Contents lists available at ScienceDirect Journal of World Business journal homepage: www.elsevier.com/locate/jwb http://dx.doi.org/10.1016/j.jwb.2015.07.001 1090-9516/ß 2015 Elsevier Inc. All rights reserved.